Blockchain.com May Suffer $270M in Losses for 3AC's Insolvency
Cryptocurrency exchange Blockchain.com may suffer a total of $270 million in losses due to Three Arrows Capital's inability to repay loans due to the bankruptcy and liquidation of Three Arrows Capital.
Earlier, the embattled cryptocurrency hedge fund, Three Arrows Capital (3AC) filed for Chapter 15 bankruptcy in the U.S. as it looks to preserve its assets in the country.
The woes of Three Arrows Capital were ignited by the collapse of LUNA-UST which the company has a significant amount of exposure to. Three Arrows Capital has been ordered into liquidation by a British Virgin Islands court.
Blockchain.com CEO Peter Smith mentioned in a letter to shareholders that “Three Arrows is rapidly becoming insolvent and the default impact is approximately $270 million worth of cryptocurrency and U.S. dollar loans from Blockchain.com.”
He said that the company deceived colleagues in the cryptocurrency industry and sought legal help to protect its own interests and hold them accountable to the greatest extent possible.
The company said that Blockchain.com is operating well and that the company's users will not be affected and remain liquid and solvent.
Three Arrows has repaid over $700 million worth of cryptocurrency.
Cryptocurrency exchange Blockchain.com is expected to go public as soon as this year, according to a Bloomberg report in April.
Digital asset lending firm, Genesis Capital, said it would take risks in filing for bankruptcy with Three Arrows Capital but would try to reduce the hedge fund’s bad debt risk as much as possible.
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